Principles of Cost Accounting
17th Edition
ISBN: 9781305087408
Author: Edward J. Vanderbeck, Maria R. Mitchell
Publisher: Cengage Learning
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Textbook Question
Chapter 4, Problem 18E
Housley Paints Co. had a remaining debit balance of $25,000 in its under- and overapplied factory
- a. Determine the prorated amount of the underapplied factory overhead that is chargeable to each of the accounts.
- b. Prepare the
journal entry to close the debit balance in Under- and Overapplied Factory Overhead.
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Check out a sample textbook solutionStudents have asked these similar questions
The Mystic Manufacturing Company's Factory Overhead T-account at the end of the fiscal
year shows Actual Overhead in the amount of $450,000 and Allocated Overhead in the
amount of $480,000.
REQUIRED: Which of the following is true in describing this Accounting scenario?
A) Overhead is under-applied by $30,000 and the journal entry to close out MOH would require
debiting Cost of Goods Sold (COGS)
B) Overhead is under-applied by $30,000 and the journal entry to close out MOH would require
crediting Cost of Goods Sold (COGS).
C) Overhead is over-applied by $30,000 and the journal entry to close out MOH would require
debiting Cost of Goods Sold (COGS).
D) Overhead is over-applied by $30,000 and the journal entry to close out MOH would require
crediting Cost of Goods Sold (COGS).
Before disposing of its year-end manufacturing overhead balance, Puppovich Enterprises had the following amounts on its records:
Actual manufacturing overhead
690,000
Applied manufacturing overhead
655,000
Unadjusted cost of goods sold
1,700,000
If O’Pupper closes the balance of its manufacturing overhead account directly to cost of goods sold, how much is the adjusted cost of goods sold?
Coop's Stoops estimated its annual overhead to be $72,000 and based its predetermined overhead rate on 24,000 direct labor hours. At the end of the year,
actual overhead was $77,190 and the total direct labor hours were 23,830.
What is the entry to dispose of the overapplied or underapplied overhead? If an amount box does not require an entry, leave it blank.
Cost of Goods Sold ✓✓
Manufacturing Overhead
X
✓
✓
X
Chapter 4 Solutions
Principles of Cost Accounting
Ch. 4 - What are factory overhead expenses, and what...Ch. 4 - What are three categories of factory overhead...Ch. 4 - What are the distinguishing characteristics of...Ch. 4 - When a products cost is composed of fixed and...Ch. 4 - What effect does a change in volume have on total...Ch. 4 - Distinguish between a step-variable cost and a...Ch. 4 - What is the basic premise underlying the high-low...Ch. 4 - What are the advantages and disadvantages of the...Ch. 4 - Differentiate between an independent variable and...Ch. 4 - Prob. 10Q
Ch. 4 - What is a flexible budget, and how can management...Ch. 4 - How does accounting for factory overhead differ in...Ch. 4 - What is the function and use of each of the two...Ch. 4 - What are two types of departments found in a...Ch. 4 - What are the two most frequently used methods of...Ch. 4 - When using the sequential distribution method of...Ch. 4 - When using the sequential distribution method of...Ch. 4 - Is it possible to close the total factory overhead...Ch. 4 - What are the shortcomings of waiting until the...Ch. 4 - What are the two types of budget data needed to...Ch. 4 - Prob. 21QCh. 4 - What factory operating conditions and data are...Ch. 4 - Prob. 23QCh. 4 - How does activity-based costing differ from...Ch. 4 - What steps must a company take to successfully...Ch. 4 - What is the relationship between activity-based...Ch. 4 - Prob. 27QCh. 4 - Prob. 28QCh. 4 - If the factory overhead control account has a...Ch. 4 - Prob. 30QCh. 4 - Classify each of the following items of factory...Ch. 4 - Ames Automotive Company has accumulated the...Ch. 4 - Prob. 3ECh. 4 - Using the data in E4-2 and spreadsheet software,...Ch. 4 - El Paso Products Company has accumulated the...Ch. 4 - Computing unit costs at different levels of...Ch. 4 - Identifying basis for distribution of service...Ch. 4 - A manufacturing company has two service and two...Ch. 4 - A manufacturing company has two service and two...Ch. 4 - Compute the total job cost for each of the...Ch. 4 - Classify each of the following items of factory...Ch. 4 - Job 25AX required 5,000 for direct materials,...Ch. 4 - Job 19AB required 10,000 for direct materials,...Ch. 4 - Match each of the following cost pools with the...Ch. 4 - The books of Petry Products Co. revealed that the...Ch. 4 - The general ledger of Lawson Lumber Co. contains...Ch. 4 - Nelson Fabrication Inc. had a remaining credit...Ch. 4 - Housley Paints Co. had a remaining debit balance...Ch. 4 - The cost behavior patterns below are lettered A...Ch. 4 - Miller Minerals Co. manufactures a product that...Ch. 4 - Scattergraph method Using the data in P4-2 and a...Ch. 4 - Using the data in P4-2 and Microsoft Excel: 1....Ch. 4 - Listed below are the budgeted factory overhead...Ch. 4 - Menlo Materials is divided into five departments,...Ch. 4 - Distribution of service department costs to...Ch. 4 - Journalizing the distribution of service...Ch. 4 - Channel Products Inc. uses the job order cost...Ch. 4 - Determining job costcalculation of predetermined...Ch. 4 - Focus Fabrication Co. uses ABC. The factory...Ch. 4 - Mansfield Manufacturing Co. uses ABC. The factory...Ch. 4 - Hughes Products Inc. uses a job order cost system....Ch. 4 - Abbey Products Company is studying the results of...Ch. 4 - The following information, taken from the books of...Ch. 4 - Rockford Company has four departmental accounts:...Ch. 4 - Luna Manufacturing Inc. completed Job 2525 on May...Ch. 4 - Phillips Products, Inc. had a remaining credit...Ch. 4 - Nathan Industries had a remaining debit balance of...Ch. 4 - Chrome Solutions Company manufactures special...Ch. 4 - Activity-based Costing
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- Nelson Fabrication Inc. had a remaining credit balance of $20,000 in its under- and overapplied factory overhead account at year-end. The balance was deemed to be large and, therefore, should be closed to Work in Process, Finished Goods, and Cost of Goods Sold. The year-end balances of these accounts, before adjustment, showed the following: Determine the prorated amount of the overapplied factory overhead that is chargeable to each of the accounts. Prepare the journal entry to close the credit balance in Under-and Overapplied Factory Overhead.arrow_forwardPhillips Products, Inc. had a remaining credit balance of $10,000 in its under- and overapplied factory overhead account at year-end. It also had year-end balances in the following accounts: Required: Prepare the closing entry for the $10,000 of overapplied overhead, assuming that the balance is not considered to be material. Prepare the closing entry for the $10,000 of overapplied overhead, assuming that the balance is considered to be material.arrow_forwardNathan Industries had a remaining debit balance of $20,000 in its under- and overapplied factory overhead account at year-end. It also had year-end balances in the following accounts: Required: Prepare the closing entry for the $20,000 of underapplied overhead, assuming that the balance is not considered to be material. Prepare the closing entry for the $20,000 of underapplied overhead, assuming that the balance is considered to be material.arrow_forward
- If the factory overhead control account has a credit balance of 2,000 at the end of the first month of the fiscal year, has the overhead been under- or overapplied for the month? What are some probable causes for the credit balance?arrow_forwardAt the end of the fiscal year, there s a relatively minor balance in the factory overhead account. What procedure can be used for disposing of the balance in the accountarrow_forwardA. What is (1) overapplied factory overhead and (2) underapplied factory overhead? B. If the factory overhead account has a debit balance, was factory overhead underapplied or overapplied? C. If the factory overhead account has a credit balance at the end of the first month of the fiscal year, where will the amount of this balance be reported on the interim balance sheet?arrow_forward
- At the end of its current year, a company learned that its overhead was underapplied by $1,500 and that this amount is not considered material. Based on this information, the company should a. Credit the $1,500 to Finished Goods Inventory. b. Credit the $1,500 to Cost of Goods Sold. c. Debit the $1,500 to Cost of Goods Sold. d. Do nothing about the $1,500 because it is not material and it is likely that overhead will be overapplied by the same amount next year. e. Include the $1,500 on the income statement as “Other Expense.”arrow_forwardAt the end of the year, overhead applied was $42,000,000. Actual overhead was $40,300,000. Closing over/underapplied overhead into Cost of Goods Sold would cause net income to increase or decase and by how much? check_circleAnswer Step 1 Underapplied overhead: When there is a debit balance in the manufacturing overhead account during the month end, it indicates that overheads applied to jobs are less than the actual overhead cost incurred by the business. Therefore, the debit balance in the manufacturing overhead account is referred to as underapplied overhead. Overapplied overhead: When there is a credit balance in the manufacturing overhead account during the month end, indicates that overheads applied to jobs is more than the actual overhead cost incurred by the business. Therefore, the credit balance in the manufacturing overhead account is referred to as overapplied overhead. Step 2 Calculate the overapplied or underapplied overhead. help_outlinefullscreen Step 3…arrow_forwardSagon Corporation has provided data concerning the Corporation's Manufacturing Overhead account for the month of September. Prior to the closing of the overapplied or underapplied balance to Cost of Goods Sold, the total of the debits to the Manufacturing Overhead account was $76,000 and the total of the credits to the account was $66,000. Which of the following statements is true? Multiple Choice Manufacturing overhead for the month was underapplied by $10,000. Manufacturing overhead transferred from Finished Goods to Cost of Goods Sold during the month was $76,000. Manufacturing overhead applied to Work in Process for the month was $76,000. Actual manufacturing overhead incurred during the month was $66,000.arrow_forward
- At the end of their fiscal year Western Industries Ltd. reported the following selected, unadjusted balances:Raw Materials Inventory - $6,000Work in Process Inventory - $62,250Finished Goods Inventory - $74,700Cost of Goods Sold - $278,050Manufacturing Overhead - $2,850 creditWestern Industries uses the proration method to eliminate any balance in Manufacturing Overhead. Which of the following is the correct journal entry to eliminate the balance in Manufacturing Overhead? Select answer from the options below Manufacturing Overhead 2,850.00 Raw Materials Inventory 80.00 Work in Process Inventory 415.00 Finished Goods Inventory 499.00 Cost of Goods Sold 1,856.00 Work in Process Inventory 427.50 Finished Goods Inventory 513.00 Cost of Goods Sold 1.909.50 Manufacturing Overhead 2,850.00 Manufacturing Overhead 2,850.00 Finished Goods Inventory 603.50 Cost of Goods Sold 2,246.50 Manufacturing Overhead 2,850.00 Work in…arrow_forwardThe actual overhead for a company is $57,548. Overhead was based on 5,000 direct labor hours and was $2,548 underapplied for the year. A. What is the overhead application rate per direct labor hour? per direct labor hour B. What is the journal entry to dispose of the underapplied overhead? If an amount box does not require an entry, leave it blank. Accounts Payable Accounts Receivable Cash Cost of Goods Sold Manufacturing Overheadarrow_forwardCALCULATOR PRINTER VERSION 1 BACK NEXT Problem 4-30 Coronado, Inc. manufactures ergonomically designed computer furniture. Coronado uses a job order costing system. On November 30, the Work in Process Inventory consisted of the following jobs: Job No. Item Units Accumulated Cost CC723 Computer caddy 25,000 $970,000 CH291 Chair 18,000 432,000 PS812 Printer stand 25,000 251,000 $1,653,000 On November 30, Coronado's Raw Materials Inventory account totaled $679,000, and its Finished Goods Inventory totaled $3,495,400. Coronado applies manufacturing overhead on the basis of machine hours. The company's manufacturing overhead budget for the year totaled $4,600,000, and the company planned to use 920,000 machine hours during the year. Through the first eleven months of the year, the company used a total of 836,000 machine hours, total manufacturing overhead amounted to $4,284,500, and Cost of Goods Sold was $4,294,500. Coronado purchased $8,750,250 in raw materials in December and incurred…arrow_forward
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